Meeting

A Conversation With Foreign Minister Abdallah BouHabib of Lebanon

Friday, September 23, 2022
Speaker

Minister of Foreign Affairs and Emigrants, Lebanon

Presider

Host, Ayman, MSNBC; CFR Member

Foreign Minister Abdallah BouHabib discusses the relationship between Lebanon and the West, especially in light of Russia’s war in Ukraine, global humanitarian issues including refugees and food insecurity, and the future of Lebanon’s economy.

Transcript: 

MOHYELDIN: Ladies and gentlemen, good morning. Welcome to the Council on Foreign Relations. My name is Ayman Mohyeldin. I’m the host of the Ayman show on MSNBC. It is my great honor and privilege to preside over today’s conversation with his excellency the foreign minister of Lebanon. It is going to be a lively conversation.

We were joking yesterday, Richard and I, of all the countries that we’ve been listening to speeches here at the U.N., perhaps no country is facing the list of and complexities of challenges that the current government of Lebanon is facing. So, to some extent, our hearts and sympathies are with you, certainly for people who love Lebanon, who have been to Lebanon, who have covered Lebanon, like I have. So it’s a very special country and we’re very delighted that you could make some time for us today, given how busy your schedule is.

Just a quick reminder, this is on the record. So it is also being streamed. We are going to have a little bit of a conversation and then I’ll open it up to the members here in the room, as well as to anyone who is joining us online. So feel free to submit your questions when we get to that portion of the event.

Mr. Minister, as I was saying, when you look at the list of challenges that Lebanon is facing, it’s almost hard to begin with one: economically, politically, security-wise. And I wanted to kind of start to get your perspective, broadly speaking, about what you think today is the single biggest challenge that Lebanon is facing.

BOUHABIB: Oh, it’s very difficult, really, to identify it. But I think now it is presidential elections. It’s very difficult to really elect a president, and the parliament elects the president. And the difficulty comes from the fact that no one group can have a quorum in order to hold a meeting, and the meeting would elect the president. We can elect a president at the beginning—the first round; we need two-thirds majority. But in the second round, we need the half plus one. And the issue is nobody can muster the two-thirds majority. So far, there are no groupings, no parties together can muster the two-thirds majority, two-thirds quorum, in order to hold the elections and have—and have the president be elected at half plus one of the number.

So we don’t see any progress in the communication between the various groups. And this parliament was elected last May and it’s a different parliament than the ones we had in the past. We have new blood coming. Something like out of 128 members of parliament, we have something like twenty, twenty-five of them new blood. Some of them are descendants of old—of politicians, but a lot of them are newcomers familywise and individuals.

MOHYELDIN: So when you—when you start with this political impasse, can any of the other stuff get solved so long as Lebanon remains in this political impasse with potentially no president and a caretaker government that, arguably, does not have the power of the state to conduct state affairs?

BOUHABIB: Well, that’s why, for example, we are in a hurry to have an agreement on the maritime borders with Israel. I think we are both in the same situation. If we don’t have a president after the 31st of August, this means, you know, it would be very difficult to approve an agreement because it’s a(n) international agreement and it will need the signature of every minister in the government, and one of us could be against this. It’s easier to have it. And Israel has elections on the 1st of November, and the elections there also affirm Mr. Netanyahu is elected the story is that—and he declared it—that he would be against the agreement.

So that’s why our American friends are pushing hard in order to have an agreement very soon, and I think the agreement—I mean, the gap is very narrow now. A few things and it will be—we may have to sign it soon.

MOHYELDIN: I know you don’t want to negotiate in public—and we will get to some of the other stuff—but since you brought it up, can you give us the general contours of what that agreement looks like? What is it that Lebanon was asking for?

And as you know, obviously people here are watching very closely some of the statements that have been coming out from Hezbollah in Lebanon, and they have taken some strong comments and statements about the Lebanese negotiating position in all of this.

BOUHABIB: Yeah, well, there are, you know, lines, as we call them. Line one, Israel says this is my borders. Line twenty-three is formerly the Lebanese borders. There are some Lebanese who made line twenty-nine, which goes south. And there is between line one and line twenty-three a Hof line, which gives this the controversial area of 865 square kilometers—55 percent to Lebanon, 45 (percent) to Israel. And it was Diplomat Hof who put it in, so it’s called Hof line.

I think we are negotiating now around line twenty-three, which the government approved in something like—in 2011 or something like that. So we have line twenty-three. We are negotiating around it, and most of the area will be for Lebanon.

And there is what we call a possible Qana gas field, even this—it goes to south of the twenty-three line, but Israel—we are negotiating how to deal with it because there is an agreement that Lebanon would look for gas there.

And so it’s kind of soft. I can’t go into detail on that. It’s kind of soft.

MOHYELDIN: Let me start by going back to the topic that I wanted to start with, which is the humanitarian crisis that Lebanon is facing. It has by most accounts a million and a half Syrian refugees, nearly half a million Palestinians. It has by some accounts the highest refugee per capita in the world of any country.

There’s a lot of concern about the pressure that the refugee situation spilling over from Syria and neighboring countries is putting on Lebanon. Can you talk to us a little bit about what that is doing to your country, and how you think it should be solved?

BOUHABIB: You know, we are around 4 million Lebanese with one a half-plus million Syrians, plus half a million Palestinians, and therefore, 50 percent of population of Lebanon are kind of refugees. We don’t use the word refugees for Syrians coming from Syria. We use the word displaced Syrians.

No, we don’t think it’s that—you know, two million, one and a half million could be political refugees because most of these people that we encounter every day don’t deal with politics. They run away from the war. They run away for economic opportunity, and they may have run away from military conscription.

You know, Syria has this law, military conscription, which the U.S. up until the ‘70s had it—and I think Israel has it. So you cannot yet say, no, Syria has to remove this law before they go back. I mean, this is a sovereign decision to them.

So these guys they receive help from UNHCR, and UNHCR is mostly financed by Western nations. I don’t think Russia and China contribute a lot to it. And the fact is now that the number of Syrians born in Lebanon exceeds the number of Lebanese born in Lebanon, and the reason is that Syrians that go to hospitals and, you know, back—they come mostly from rural areas or midwives help them. Now they go, UNHCR pays them, while the Lebanese is deferring because they cannot pay and the hospitals don’t receive them and they have insurances, and with the downfall of the money of the currency they cannot go to hospitals anymore. They defer going to hospitals or to any doctor now. So there are more Syrians born there, and this is very dangerous.

From the beginning we are trying to keep—Lebanon was kind of totally Western country. Now it’s mixed up and we’re trying to tell the Europeans especially, keep us connected to Europe so that Lebanon would remain Western country. But now it’s the Europeans, more than anybody else, that won’t accept, you know, even compromise on these refugees. You know, up until recently they refused to dialog on this. You know, I was in Brussels on a meeting to raise funds for Syrian refugees and we mentioned at the time, I mentioned at the time the government position that if you want to pay them, pay them in Syria. They can go back easily to Syria and we can negotiate some kind of agreement between UNHCR and Lebanon. No, it’s not safe to go to—why not safe to go there? Of course, not very safe. I’m not saying that Syria is the peaceful country we’d like it to be. I mean, they’re still partially on war. But there is now some kind of stability now. And under the regime, there are something like 18 million Syrians. And so, I mean, you’re treating those who are outside better than you’re treating those who are inside. Why don’t you invite them all to become outsider and treat them nicely?

And the money—yesterday I was in a meeting on UNRWA for the Palestinian refugees and the money is shrinking. I mean, they are not paying. Big countries—the Gulf countries are not paying. That’s what they heard in the meeting. And Western countries, because of Ukraine, has been reducing it. So what’s going to happen? Another UNRWA? And the Palestinians have been, they say, seventy-four years waiting for a political solution and the Syrians now, eleven years and going, so we ask the Europeans, I mean, do you have a road map? You know when it’s going to happen that they go back? And they have nothing except to support them staying in Lebanon. And so we’re taking some kind of measures and now we are more talking with them than before and more talking with UNHCR. We had a good meeting with the head of UNHCR, the commissioner of UNHCR, and it was a good meeting. And we’re going to continue the dialog with them when we go back, when I go back because it’s the Foreign Ministry which is in charge in this regard.

So it’s a very difficult problem. We—although some politicians said, you know, we have to force them to go back, this is not the government position at all. There will be no forcing Lebanon. Lebanon would not force any refugee to go back. And political refugees are welcome to stay. We don’t want those who are involved in politics to go back and, for one reason or another, be punished or sanctioned or whatever is the case. No, we want them to stay in Lebanon or go wherever they want.

So we have a big problem now facing it. It threatens—I mean, even the World Bank four or five years ago estimated that the cost to Lebanon is something like $3-4 billion. Why? I mean, they use our schools. They use—I mean, we collect the garbage; they use our water or electricity, don’t pay for any of these, the roads. All the infrastructure, whether physical or social infrastructure, you see they’re using it and it’s the country that is paying for that, not special individual.

Worse than that is that as they start competing with the low income groups in Lebanon, and that’s why you see a lot of Lebanese are now taking the boats and sailing towards Europe, and today, starting yesterday, we had a boat that was carrying somewhere between a hundred and a hundred fifty Lebanese and Syrians and Palestinians, and it was a bad boat, too many people on it. It sank, and as of yesterday, we heard something, like forty, died. But they can’t find many yet and only, like, twenty-five that were able to escape or to be picked up by the Syrian navy because they were next to Syria.

So it’s a very hard situation. It’s causing a lot of problem(s) for Lebanon, and we’d like to solve it through dialogue, not by forcing it—forcing them to go back.

MOHYELDIN: So let me ask you about the economic situation. I want to just read for you something recently from the IMF, which I’m sure you’re very familiar with.

The IMF said Lebanon’s gross domestic product has contracted by more than 40 percent since 2018. Inflation remains in triple digits. Foreign reserves are dwindling. The exchange rate has hit a new low just this week, thirty-eight thousand Lebanese pound to the dollar. And amidst the collapsing revenues and drastically suppressed spending, the public sector institutions are failing. Basic services to the population have been drastically cut.

I speak to a lot of Lebanese friends and colleagues of mine, and some would argue that Lebanon appears to be a failed state. Is Lebanon a failed state?

BOUHABIB: Well, first, let me say I agree with all of these estimates from the IMF. I mean, in 2019 our GDP was, like, $17 billion. This year, it will be something like a couple of billion dollars, not more and the budget—I mean, we used to operate on a budget something like 10 (billion), $12 billion.

Now, we cannot agree on a budget of $1 billion because Lebanon is an open country and so most of the things now is dollarized, in fact, and as you mentioned, the dollar value—the dollar exchange with the Lebanese currency from—went up from fifteen hundred for Lebanese pounds for the dollar. Now it’s around thirty-eight thousand (pounds).

The situation is very bad. We do live—Lebanon does live and jobs are created a little bit internally by Lebanese living abroad. We have around a million Lebanese living in Europe, in Africa, and in the Gulf. I say, of course, we have a lot of Lebanese living in the United States. But those are not immigrants. They remain attached to Lebanon because we’re close by and they cannot become—take the nationality of the various countries they are in. So they remain in Lebanon.

These—they send a lot of remittances to Lebanon. This summer estimated—because they came this summer to Lebanon—a lot of them—like, $4 billion, and during the year we exceed—this year it was $7 billion.

So yeah, we have three major sectors that need to be fixed and if we don’t fix them the situation would remain to be bad, and so far, there hasn’t been much progress on this.

First, the electricity situation, because so far until now the public electricity is two hours a day and the rest is on generators. Like, in the city so many generators, which is a consumption of fuel, is run by private sector and is very expensive, like, $.55 per kilowatt they sell it because they are small generators, while the government up until, I think, now—although there was a decision to raise it to $.27 a kilowatt, up until now it was charging $.01 a kilowatt. So there isn’t enough money or there isn’t money, so to speak, to buy fuel. So the Iraqis are giving us seventy-five thousand a month and this will give us, like, one and a half to two hours of electricity a day. Now, we’re talking with—before the meeting that Iranian—the Iranian, they are—they give us a grant for 600,000 pounds for five months. Each month’s 120,000 pounds. And we’re still debating here to talk with them, but also afraid of sanctions. I mean, sanctions are very dangerous to us. Sanctions, they threaten our economy—our weak economy—now a lot. So we have to discuss it to see how we can do it in the absence of any other assistance from abroad, you know? So this is one, electricity.

The other one is the banking sector. There is no confidence in the banking sector. Nobody has put deposits in the banking sector, except for the daily work you have to do. Of course, if your salary comes through private sector, you cannot even get it all. You can get half of it and then gradually every week, something like that.

And the third thing is the central bank. We’ve got to have a central bank that goes back to its functions, not to be unlimited—not to give unlimited loans to the public sector, but to be restricted; to have, you know, some kind of restrictions that would prevent it also to get—it’s not bankrupt, but kind of, close to being bankrupt.

MOHYELDIN: So, I mean, you’re describing a very dire situation. So I go back to the question, are we seeing Lebanon essentially collapsing? Is it a failed state? Because you described a political impasse where they can not reach an agreement, the economic situation is getting gradually worse. That cannot be solved without a political agreement. The refugee humanitarian crisis is causing great strain on the country. That cannot be resolved without a political agreement. And there is no sense of reform coming out of Lebanon for any of these measures that you’ve talked about for reforming these sectors. So is Lebanon a failed state?

BOUHABIB: The answer is no. Let me tell you why.

First, I mean, I think at the end we will approve the staff-agreement we had with the IMF. We had a staff agreement. There were some conditions. I think the parliament—there are a lot of very powerful pressure groups that are against it, whether it is the banking sector or the merchants, the trade sector. They both are very strong and they’ve been for the last few decades very, very strong. And therefore, it’s very difficult to neglect them, and to go—you have to make a deal with them as you go in the parliament because the parliament, after all, you know, it is also part of this—some of them are part of this group.

So we’ll have the—we’ll have the reform. And I think, you know, this year we’ll have complete agreement with the IMF—we say inshallah, right—hopefully. I don’t want to be—to be 100 percent sure that this will happen, so—but I think it would happen. There is a determination on the government part.

The other thing is that the private sector has accommodated itself to the situation. Whether it is salaries, or prices, or it’s—you know, it’s done. They have no problems. The only problem we have is the public sector because of the pressure groups like the custom duties still is measured on the basis of $1:1,500, whereas the dollar now is 38,000. So the government does not have—does not have revenue to pay or to raise—to raise wages. And the public sector gets something—like, there are—most of the people in the public sector makes in dollars less than $100. Like, a minister makes something like $225 nowadays, you know?

So it’s not easy to get out of it. But it’s not easy also—Lebanon, because of its external dimension, whether with Lebanese or friends of Lebanon, we really—so with all the governments or the meetings we had here at the U.N., very strong support for Lebanon—for the recovery of Lebanon, which is helpful. A lot of money also, like the U.S., is—the Lebanese army, it’s the backbone of our country. If it fails, the whole country—I don’t know what would happen. I mean, more terrorism, more, of course, mess, and people leaving in the boat. God knows where they will go. So the army and security forces are really holding the country together.

And I think, you know, the United States understands that. And there was approved of a loan to give Lebanon army, armed forces, money, like $100 a month, because salary of a soldier is less than—it’s around $25 a month. So—and to create a fund in the United Nations so that other countries can contribute. Qatar did, like, a couple months ago gave us $60 million for the armed forces as well. So we receive a lot of help from outsiders and we receive more help from Lebanese abroad. They all send money to their families living in Lebanon.

So that’s why I don’t think we’ll be a failed state, although we are close to being so.

MOHYELDIN: Yeah, I think a lot of people are watching and extremely concerned.

Can you reform Lebanon politically with the same political class that exists? How do you get more and new Lebanese politicians to emerge on the scene? I don’t have to tell you Lebanon is consistently criticized for its levels of corruption, and yet people are seeing the same exact leaders, the same exact political factions still making these decisions about reform.

BOUHABIB: Well, you know, that’s the result of having democracy, is that you get leaders that are elected. And they are—these people were elected. We had—we had elections last May and this is the parliament. The old, they got weakened a little bit, but not much. We have newcomers that are unable to agree with each other in order to form a strong bloc. If the twenty-five of them formed a bloc, they would be very strong and they can cause change. But they are also fragmented.

I remember when I’m in school I was told that a French orientalist said that he came to the Middle East, he found—he said they found in Egypt a state and in Lebanon people. It’s very difficult to rule Lebanon. Small as it is in population and in area—it is something less than 11,000 square kilometers; not miles, kilometers—and still, it’s very, very difficult to—really, to make much difference.

Like, we have a government that’s all non-political people. Maybe nominated by political people, but still we find ourselves very difficult to make a difference in the running of the country. It’s not easy to have—to have change. I mean, United States has something like that in the South. Having lived in the United States for thirty years, we—I mean, I—and some of it in Nashville, Tennessee, so I know the, you know, the pressure groups, the groups that control the situation. And that’s—we’re having such kind of thing in Lebanon.

And the issue is that to have a—what do you call it? I mean, the only—there were three countries that practice democracy, real ones, and Lebanon, not the government-controlled elections: Iraq, Lebanon, and Tunisia. Tunisia is moving differently now. Lebanon and Iraq were still on the same—it’s very difficult to have a democracy. And so but Lebanese have always—they like freedom to dictatorship. They enjoy freedom, even if this freedom gives us some kind of a messy situation, like it is now. And worse, sometimes, you know?

MOHYELDIN: Yeah. I was going to say, I think we’re learning in this country as well about how difficult democracy can be. I don’t think anyone would arguably say that American should be a model for democracy, given what we’re going through and our current climate here politically. (Laughter.)

Let me—let me ask you just about your relations with the West, since you brought it up. The State Department put out a statement, obviously, expressing support for Lebanon’s sovereignty. They do want to help. What are your relations right now with Europe and the United States? I mean, it seems there’s a disagreement on how to deal with the refugee crisis, if I’m reading that correctly from what you were saying. You don’t see eye-to-eye on how to resolve this, but are you getting the support you need from Western countries? Or are there major gaps of disagreement about what needs to happen inside Lebanon?

BOUHABIB: The United States is working more with the government than European countries. This word, “corruption,” means that we create NGOs which is parallel to the government administration and weakens government administration. I mean, you would have sometimes—when I came to—and I have here some of my colleagues. When I came to the ministry a year ago, we didn’t have stationery. So I have to ask a friend that—to include stationery because there was no money in the government. I mean, you know, this—the revenue is very, very—every time you want to travel, like coming to New York, I have to think and to plan and, et cetera, how to get the tickets, how to get the hotel.

But we have—as I mentioned before, we have a very strong diaspora, and so we have some consulates that really are—that have a lot of Lebanese. And there is a lot of income, these consulates that you have. So we finance our external moves in the ministry from consulates that have money—the consulates in the Gulf, consulates in Africa, consulates in some Western countries like New York, or Washington, or Los Angeles, or in Berlin, or other.

So we’re trying to manage, and cut here and there, and reduce the costs—reducing the salaries, reducing the local employees in every ministry—in order to extend—with the money that we have, extend a few years because we think that next two, three years are going to be very hard years on—(inaudible).

So it’s a very difficult time, so I agree with you, but we’re managing together.

MOHYELDIN: But diplomatically the relationships between the American government, the Lebanese government?

BOUHABIB: Excellent. I think it is excellent. It’s good.

MOHYELDIN: The same with the French as well?

BOUHABIB: Same with the French. There is more difference on the French on the refugees. Otherwise, fine. And there is—what do you call—some disappointment from the president of France, Macron—from President Macron because he came to Lebanon twice, and suggested a few things that didn’t go well. There could be some bitterness, I don’t know.

But no, relation with Western countries—except towards some European countries on the refugees, not all of them—is pretty good.

MOHYELDIN: We’re going to open it up in just a second, but a final question to you from my end about Lebanon’s position vis-à-vis the war in Russia and Ukraine. It’s a fine balance, I guess, if you will, that Lebanon is trying to maintain.

Seventy percent of your wheat comes from Ukraine at one point, and that obviously has a tremendous amount of impact for you. But Russia is also a major player in the region that is affecting Syria and contributing to the destabilization that has taken place in Lebanon.

BOUHABIB: We talk position from the beginning. It was principle to us. I mean, we are a country that’s suffered from occupation, and therefore, we understand Ukraine.

And we are the only country in the region—not in the Arab world, in the region, including Israel—that condemned the Russian military use—use of military to solve the problems with Ukraine because it is really a principle to us.

Now we—then, OK, sanctions started coming and so on. We had—Lebanon was chairing the Council of Foreign Ministers—of the Arab League Foreign Ministers. We had a meeting, like, a few months ago after that. I think it was in March, yes, in Cairo, and we decided against politicizing U.N. organizations.

We felt that the U.N. should not become like the League of Nations. It becomes one-sided. No, that Russia should remain in the situations and dialogue should continue because this war cannot go forever. But we are against Russia, and we told the Russians. I called the Russian ambassador before we made the statement, and I told him that that’s what we’re going to do.

So this is our position and will remain. And also international organizations, unless it is political, has to do with military, we are—more or less, we abstain from voting.

MOHYELDIN: We’re going to open it up now to our members, both online as well as here in the room. If I could just ask you, please, when you ask your question to identify yourself, stand up so we can hear properly, and please tell us where you’re from.

This gentleman right here.

Q: Thank you. Larry Dworkin, JPMorgan. And thank you, Your Excellency, for spending the time with us today.

I wanted to come back to a topic you spoke about a little bit earlier in terms of the banking reforms that you’re hoping to see in the country. Two part question: number one, what are the reforms that you would prioritize, given your experience, relationships with the West? What do you think is most important for the country to focus on today? And then second, what is the support that you would hope to see from your partners in the West in implementing those banking reforms?

BOUHABIB: As I mentioned, we have a very strong banking sector politically and it collapsed and lost the confidence of the Lebanese economically and financially. But they’re still very strong politically. There is no solution, so to speak, how to deal with it. The IMF thinks, I think—I’m not involved in the IMF—negotiation with the IMF—that the number of banks could be reduced and cut and maybe there will be merging or other things, but no step has been taken so far. We’re still where we are, where we started in 2019 after they closed for three weeks and then suddenly there’s no money in their—in their boxes.

MOHYELDIN: This gentleman here and then we’ll take one online.

Q: Jeff Laurenti.

Minister BouHabib, you had told us of the million-and-a-half Syrian refugee—Syrian displaced persons, excuse me, who remain in Lebanon, and this is now multiple years into what seemed to be a settling into a fairly grim stalemate in Syria. During the war, Hezbollah had been involved actively, as even an armed element, assisting the Assad government. What do you see happening in Syria now in terms of a political settling in that would allow more Syrian displaced persons in Lebanon to feel it’s safe to go back? And the enclave around Idlib that remains in non-state hands, is that a source of long-term unrest? Is this an Islamist stronghold, or how do you all see that from Lebanon? And has Hezbollah stopped its engagement in the military struggle inside Syria?

BOUHABIB: Well, the West or the United Nations is asking for a negotiated settlement. I think this is going nowhere. It started I don’t know how many years ago—at the beginning of the war, maybe in 2012—and it’s going nowhere. Even if you read President Obama’s memoirs, you see that, you know, a regime that’s supported by two big countries like Russia and Iran is not going to fall to the opposition of doctors and pharmacists and others, and if it goes from the people from the general population, they become Daesh or ISIS and other things.

So, yes, we have Syrians outside and we have Syrians, as I said, something like 18 million under the control of the regime, out of 25 million, some—approximately like that. And it doesn’t make—Syria is not—Syria is a country that mostly Sunnis and probably there are around 2 million Alawites and maybe there was a little bit more than 2 million Christians but now less than a million probably, and the other sects, like the Druze and the Ismailis, they don’t make half a million or so, or even a million, and the rest are Sunnis.

So I don’t think this regime, the regime—the Assad regime—is going to compromise on the issue. I mean, why should they? They are in power. They control 70 (percent), 75 percent of Syria, with maybe 80 percent of the population, or maybe less a little bit. So why should they compromise with Syrians who are living abroad, whether they are in Istanbul or in Europe, who are waiting for the regime to change like what happened—like what happened in Iraq? It doesn’t work this way in the presence of Russia and Iran there. And if we want Russia and Iran there, you’ve got to negotiate with them and assure him that there would be no—there would be correct transition. Otherwise, why keep them there? So keep the status quo. I mean, you’re talking about a situation that is—that has a lot of international power there.

One thing more I would say. These U.N.—the Syrians, there is at least a hundred thousand Syrians that they go from Lebanon to Syria every month because we have records there that show that there are people that move between the two countries, which is normal.

But some of them—a lot of them—are paid by UNHCR and, therefore, the money is going to the regime because hard currency to the regime it gets—they get money from UNHCR and they work in Lebanon, get Lebanese currency, but it’s transferable to dollar easily. And so even the Lebanese currency, which has deteriorated heavily, is a hard currency to Syrians because they can exchange it to dollars or they can buy things in Lebanon. You know, anything you want to buy they can get you in Lebanon. It’s a free open country. Still is like that.

So I think the Western countries, especially the Europeans and the United States in this—I mean, they’ve got to think out of the box in regard to Syria. They cannot continue the same policy. You’ve got to negotiate. We have to have a new constitution. It’s not going to happen. This is my own—it’s not the government position. It’s my own analysis looking at the situation there, reading, observing it, talking to people who go and come.

They’re not going to—they’re not—it’s not going to happen. It’s not going to change. And, yes, they’ll go to a meeting. I don’t know if they still go to meetings in Astana or in somewhere else. You know, yes, they go to a meeting. So what? And no progress in these meetings.

So something has to happen different from what’s going on now.

MOHYELDIN: I believe we have a question virtually that we’re going to take now.

OPERATOR: We’ll take our next question from Aaron David Miller.

Q: Mr. Minister, it’s really good to see you.

If you had to make the case to the American public why Lebanon should be a priority for the United States, how would you go about it?

BOUHABIB: You always ask difficult questions, Aaron. (Laughter.)

Well, I mean, Lebanon—a failed state means terrorists, means boats sailing—a lot of boats sailing towards the West. It means chaos, chaos that would affect Israel as well and it would affect also Syria but less so because Syria it’s a controlled situation there, and you know who would be in charge.

Now we have, politically, every group. There’s nobody in charge. Hezbollah is very, very—is very strong, is a—but it’s a group. It’s a Shiite group. It has no control over Sunnis or Christians or Druze. Each one has different, you know, political position.

But militarily, it becomes different. Yes, they are strong, and if the army, I mean, is broken down God knows what would happen. But Hezbollah is not going to break down.

Would they be the occupiers of all of Lebanon? It’s very difficult for them because the population does not accept. There will be more, I would say, new power militias, this one supported by Hezbollah, this one not, supported by somebody else. It would be a messy situation and I think the brain drain would continue from Lebanon but on a heavy scale at that time.

MOHYELDIN: This gentleman back here.

Q: Thank you, Mr. Minister. Jamal Elshayyal from Al Jazeera English.

You described in quite a lot of detail the challenges that you are facing, both economically/socially/politically, and I felt you put a lot of emphasis on the consequences of hosting so many refugees. But the reality is I think there is a much deeper issue that Lebanon faces which hasn’t been addressed, which is essentially the paralyzing political governance system that you’ve had since—the sectarian system, which is outdated, which evidently just brings about the same people. And you have—and as somebody who’s been reporting on Lebanon the past few years, you do have a new generation of people who reject this, who don’t want to have a political elite that aren’t there out of meritocracy but are purely there because they represent numbers. And Ayman was asking you a question about, you know, the same political elite. You answered it is a consequence of democracy. But really, is it a consequence of democracy? Or is it a consequence of this political system that is outdated; that, as I say, has been paralyzing? Number one.

Number two, if you don’t mind, with regards to the economic woes that you’re facing, yes—

BOUHABIB: Let take it one by one. Is that all right?

Q: Oh, OK, yes. All right. (Laughter.)

BOUHABIB: You know, OK, you either—you either believe in—if you believe in democracy, you believe in elections. That’s what the elections—and nobody says the election was not clean. Nobody say. There was a lot of money, but for all sides. And you have a new group of twenty-five people. They have no project. They have no goals for Lebanon to—they are sitting and doing it and working on it, and convincing Lebanese. And I think if there is election—I’m disappointed, OK? I’m not a politician. I know politicians. I’m not one, OK? If there is elections soon, they will lose their seats because they have—so far, they gave nothing to the country. They just point at the weaknesses of the government—and they are true in doing that—but, OK, what shall we do? Nothing in this resort.

So, I mean, we are a democratic country. The sectarian system should become old, but—I mean, should be obsolete, should be out. But what is the new system? Can you tell me a group of these twenty-five members of parliament that gave a new system, except just remove the sectarian system? OK, how would you do it? OK. The elections, your right to vote for anybody, right? Most of the Christians vote for a Christian. And common—nobody—you know? In the districts that are Christians and Muslims, OK? And the facts here that it's not Christian and Muslims. It’s more than that, the divisions, right? So there are Sunnis. There are Shiites. There are Druze. There are Maronites as well, and so on. You know, OK, so it’s not like two groups. I wish it was two groups. It would be easier. We will have Democrats and Republicans and finish, you know? But it’s not. It’s more than that.

You know, people could vote for anybody. But the data is showing that most Maronites voted for a Maronite. Most Sunnis voted for a Sunni. Most Shiites voted for a Shiite. That’s our population. That’s the Middle East. Change it? Provide a new constitution or ideas. I am disappointed that these new parliamentarians, nobody—nobody—gave a new idea about how to change the system.

Q: I accept what you’re saying there. I think the issue is—and this was leading to my next question—is the stranglehold that these factions have on the population. And this leads me to the economic issue, in that people in Lebanon are so dependent on the services provided not by the state but by the factions or the different sects that they have.

And this is where I think I want to transition to the question about the economy. Yes, the presence of refugees has been overbearing or overwhelming, but it has exacerbated a problem. It has not created your economic problem. Your economic problem exists because the state has essentially been in this almost dependent—constant dependent state of handouts from the IMF, from the World Bank, from foreign governments. When you talk about electricity, for example, the reason why it’s a private-sector electricity for the generators is because the corruption and the endemic corruption that exists in the country, and each sect has its own interests there.

So if you want to fix the economy, you actually need to maybe—don’t you feel, rather—here is the question: Don’t you feel that the time has come now, as you’re on the verge of becoming a failed state if not crossing it, that this is the moment of truth where you stand in front of the mirror and say, you know what? We really just need to be honest. We’ve had an elite for the past thirty years that has squandered all the natural resources, and all the money, and everything that we have. We need to do away with them and let’s just start fresh. Get rid of the political system as it exists now. Elections, yes. They’re a democracy. But that’s the only criteria. If I’m forced to choose from a certain people, it’s not really a free choice, is it?

BAUHABIB: Yeah. Well, I can tell you, Lebanon never had a penny from the IMF. You know, it’s the first time we are negotiating with the IMF. Never in our history had any—although we are the first signers of Bretton Woods. But we never had. World Bank gives us, you know, loans like a middle-income country while now we are a low-income country. They still sometimes a little bit of soft money comes with the hard money. So let’s—we are not—we are not living on donations from international organizations or others.

Now we are. And even the World Bank is giving us consumption loans that—you know, I worked with the World Bank and I never gave a consumption loan. Now we’re given consumption loans with interest rates. So it’s not—there is no donation in this regard.

Yes, the system—you know, the system needs to be changed. Before I became a minister, since the revolution that started in November—October 2019, I wrote something like twenty-five articles about the issues and suggested things, you know, that we will do—OK, that should be done, and other things, which I don’t see it from the revolutionary now, the twenty-five members of parliament.

But how can we change it? Through a coup d’état? I mean, how? How? If there is no democracy, no elections, how would you change a system? You have to be patient and change it gradually, and perseverance is very important, and continue. Maybe if those who came can provide some good ideas of how Lebanon should be. And I challenge you to tell me that, except that criticizing the government, what they did, you know, the new ones. It should be some kind of a project that you want to do it, and you will progress it, and then you need some time. I agree with you on all the change that we need it. But how do you do it? We cannot do it by a coup d’état. It doesn’t work in Lebanon also.

Q: I’m not—I’m not voting for a coup, but you—(laughter)—

BOUHABIB: Elections. (Laughs.) Just the elections. And if there is money, money came from the other side of the groups than this, you know. (Laughs.)

MOHYELDIN: We have one more question virtually, and then we’ll come back to the gentleman here in the room.

OPERATOR: We’ll take our next question from Wafa Ben Hassine.

Q: Hi. Good morning. And thank you, Minister BouHabib, for being with us today. My name is Wafa Ben Hassine. I’m currently at Omidyar Network and a CFR term member.

As both yourself and Ayman mentioned, democracy is not easy. With the mass uprising occurring today in Iran, do you see the potential for a new wave of democratization taking place in the Middle East, especially given the economic conditions? As a reminder, both political and economic injustices were what led to the very first protests in Tunisia around ten years ago, yet not all of them led to democratic outcomes. Do you think these socioeconomic difficulties will ultimately lead to the creation of viable openings for incentives to introduce sweeping democratic reforms? What will it take? Thank you.

BOUHABIB: You know, I first start noticing Ayman in 2011 reporting from Egypt, right?

MOHYELDIN: Yes.

BOUHABIB: And said, wow, this guy, he knows, you know? (Laughs.) And you know, we were hoping that we would have some kind of—in the Arab world I’m talking—democracy, some kind of more freedom, more democracy. Unfortunately, we got here today. In 2022, Lebanon remained with a very weak democracy and a lot of freedom. And Iraq, this democracy had also—it had it before this revolution. It was a state administrated by the United States and then left, the United States, almost after—it still has some influence there, but there is a lot of Iranian influence in Iraq than before.

So I don’t see anywhere else democracy is moving. And one time I want to talk to European about, you know, about their—you know, when they say that he has to change. I said, well, why is it that you want him to change? What’s your business? And this is a government, it’s dictatorship. Is he the only dictator you’re dealing with him around the world? There are a lot of dictators around the world. It’s not like one and so on. And we thought, would you like to apply the democracy that exists in Iraq on Lebanon to any other Arab country? And the answer is always no, you know. So it is a very difficult situation. I don’t see democracy moving ahead, although we had hopes, as I said, in 2011. We had a lot of hopes but I don’t see it going ahead, going, you know, that we’ll have more democracy. The result of change—Saudi Arabia witnessed fundamental change and it’s not because of U.S. pressure or European pressure; it’s because the crown prince made it, you know? This is the way it’s done in our region.

I also, discussing with Europeans, I said look, you’ve been trying for two thousand years to change the Middle East. It doesn’t change. Crusaders stayed two hundred years, right, in the Middle East and those who stayed there, the only thing—they left some blue eyes and that’s all—(laughter)—because they’re mixed up with the population. I mean, there’s nothing changing. The Middle East or any region of the world would change according to its own pace. You cannot put a pace and ask if you don’t do that there are sanctions—didn’t work. Worldwide it didn’t work. So, you know, I know that they have to—they applied—like now in the case of Ukraine and Russia and so on. But at the end, I mean, United States put sanctions on Cuba for what—since 1960, and so what’s the result? Is the people are poorer but the ruling elites are not. I mean, they still smoke, I mean, Cuban cigars, right? (Laughs.)

So it’s a difficult situation. I’m not saying it’s easy. And also, to go back to your question, yes, we had a Ponzi scheme in Lebanon, but Ponzi scheme led by the government. It’s not led by individuals. That’s why it took long time and lots of people. Lots of Lebanese lost their—really, all their wealth that they have accumulated. I know a lot of friends from the United States, they wanted to go back home—like myself; I stayed thirty years in the United States and then went back home, leaving my family here, of course. (Laughs.) So a lot of friends of mine that went to Lebanon, sold their homes, sold their interests here, went to Lebanon, put the money in the banks, and they lost it. They don’t have—they can’t afford a price of a ticket to come back and visit. So we have a lot of suffering from this Ponzi scheme that was applied since the mid-’90s, and we still did not get out of it. Still there are what they call central bank reform. There are patches here and there on a rotten pants and you are still putting patch here and there, though. So I don’t think it’s going to work, but it’s still there, unfortunately.

MOHYELDIN: I think we have time for one last question. This gentleman right here in the middle.

Q: Hello. My name is Alfred Bridi. I’m an immigration attorney at Scale LLP. I’m Lebanese-American. I’m part of the diaspora here.

And I have a lot of clients coming to me, Lebanese clients, desperately trying to get outside of Lebanon, and from my time living in Beirut, about five years ago, I was amazed at the level of talent locally and internationally that was in the city. Today that looks incredibly different. And you mentioned the brain drain earlier in your talks and, you know, now the talent has left, has gone to, you know, London, Paris, Montreal, even Athens, New York. What is your strategy to dealing with that brain drain? What is your—what are your goals to keeping relations with that talent overseas?

And you know, you’re talking about the twenty-three new fresh faces in parliament. What is your prospects of bringing that talent back home so they can maybe affect change and bring that change that we need in Lebanon?

BOUHABIB: You know, we had elections, I told you, last May, and this election we—we opened it to the Lebanese in the diaspora. A quarter of a million registered to vote. That’s a large number. That shows how much people—and a lot of the change parliamentarians came as a result of the vote from the diaspora, and you know, I hope they are not disappointed.

But yes, I am not worried about Lebanese living in Europe or Africa or The Gulf. They come back to Lebanon at the end when we fix it, and I’m not saying it is on its way to be fixed—far away from that. But they are very much connected to Lebanon, and in the summer, they were there. I mean, they came to Lebanon. They have families. They have homes in Lebanon, these people.

Those who go to Australia or come to United States mostly—most of them—or Latin America—they stay, I agree. You know, I was ambassador to Lebanon here in the ’80s, and I used to tour United States to talk with the communities. I rarely saw a Lebanese on welfare. They’re all hard workers, and they all—you know, businesspeople—whatever it is—the business is in their minds all the time.

I used to tell a story that a Lebanese came into New York and didn’t know what to ask, and he wanted a hotdog and coke. And so he will go hotdog and coke, hotdog and coke, hotdog and coke.

And then they told him about apple pie and coffee. So he went to a restaurant and said apple pie. You know, we didn’t know—we don’t have a P in Arabic, so “abble” pie and coffee. And the waiter said, would you like to have cream with your coffee, sir? He said, “abble” pie and coffee. He said, how about cream in your coffee? He said hotdog and coke. So he—(laughter).

So the issue is that that Lebanese who came in is that now you don’t see anyone of them, really, in welfare, and they are well to do. They are in business. They are in politics. They are in medicine. They are—I’ve seen them. Being an investor here for seven years, I’ve seen them. You know, I’ve visited them, and really, they are successful.

And now, as a foreign minister, I hear about them. Whether the United States, or Latin America, or Africa, or the Gulf, they are hardworking people. But I don’t—you know, if you say, if I’m still young and want—not knowing what to do, would you go and invest in Lebanon? I tell you, no, don’t. I mean, it’s a very difficult situation now in Lebanon. Next two, three years it’s going to be very, very difficult.

MOHYELDIN: Mr. Minister, I apologize took three additional minutes of your time. We know you have a very busy schedule. Thank you for spending a part of your morning and afternoon with us today.

Thanks to all the members for their questions and for joining us. (Applause.)

(END)

This is an uncorrected transcript.

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